Tax cuts need spending restraint
I am all for tax cuts but sustainable tax cuts need spending restraint. It is likely we will get some tax relief in the 2017 Budget, and that is because the Government has managed to restrain spending so it has gone from 34% of GDP to around 28%.
News.com.au reports:
THE Trump administration has proposed slashing the number of tax brackets, abolishing death tax and eliminating most tax deductions for individuals.White House economic adviser Gary Cohn said the plan would cut the top income tax rate from 39.6 per cent to 35 per cent.
It also would reduce the number of personal income tax brackets to three from seven.
The new tax rates would be 10 per cent, 25 per cent and 35 per cent.
All very good idea, except that Trump is also proposing greater spending, so the already huge deficit will just get bigger and bigger and one day the US economy will crash due to its debt.